The key to success in agricultural e-commerce is running close to the ground

In recent years, once many industries have been given the wings of the internet, they attract the favor of the capital market and then enter a period of “wild” growth. From early vertical e-commerce, group-buying sites, and O2O in traditional industries to today's cross-border e-commerce, all have quickly become “pigs on the wind” and soared to success. But agriculture alone, China's largest traditional industry, finds it hard to easily usher in explosive growth by relying on the internet model. The

reasons are threefold:

Reason one: agricultural internet ventures carry high risk, deep difficulty, and high demands on entrepreneurs. Taking agricultural e-commerce as an example, it is very different from agricultural product e-commerce. Agricultural e-commerce focuses on the upstream and midstream links of the agricultural industry chain, and its audience is farmers. Farmers' demand for agricultural inputs is characterized by strong regionality, strong seasonality, diverse soil composition, and scattered producers, which makes the natural risks and market risks of agricultural e-commerce far greater than those of agricultural product e-commerce. Capital or entrepreneurs without a deep understanding of agriculture and a dedicated, patient approach to operating it find it very hard to easily enter this field.

⟦NL> Reason two: the model is single, the ability to integrate industry chain resources is insufficient, and it is hard to reach scale. Although China's rural internet users number 178 million, accounting for 27.5% of total internet users, internet thinking has not yet truly penetrated into “agriculture, rural areas, and farmers”, and the production mindset still cannot escape the traditional mentality of the small-scale peasant economy. Many agricultural internet entrepreneurs are the same. Although entrepreneurs have integrated the internet into agriculture, most models are single, and their later ability to integrate industry chain resources is also severely lacking, resulting in too small a scale to reach critical mass.

Reason three: there are many “pain points” in the links of the industry chain, making execution difficult. This point is the most important and also the hardest to break through. In fact, the difficulties of agricultural production are the same as those of other real industries today. Production, marketing, and distribution are each a difficult hurdle, and the detailed “pain points” in the execution of agricultural internet ventures are even harder to discover easily. Therefore, the diversity and complexity of agriculture mean that in realizing the agricultural internet, much work must sink down to the front lines of the fields to discover, execute, trial and error, and accumulate experience. The key to solving this problem is to make agricultural internet services as flat as possible and resolve issues one by one through the strategy of “running close to the ground”.

At present, the “Internet Plus” action plan has risen to the level of a national strategy. According to statistics, there are now more than 30,000 agriculture-related websites and more than 4,000 agriculture-related e-commerce companies. The “Internet Plus agriculture” model is also relatively complex, but broadly speaking it can mainly be summarized into three models: first, the smart agriculture model that deeply applies internet technology; second, the e-commerce model that comprehensively applies internet marketing; and third, the industry chain model of all-round, deep integration of the internet and agriculture.

These three models show a state of progressive advancement. Although for a period at present these three models will coexist, in the long run the model of deep integration of the internet and agriculture will be the future development trend. Using the internet to link up the chain of agricultural modernization, and penetrating advanced production factors such as information, agricultural technology, finance, and logistics into all links including agricultural input circulation, agricultural product trading, agricultural technology services, agricultural finance and insurance, and rural logistics, and deeply integrating all the attributes and functions of the internet with the links of the entire agricultural ecosystem across the whole process and all elements, is the only way to create a complete “Internet Plus agriculture”. Problems such as asymmetric information, low circulation levels, and low product capability in traditional agriculture can all be solved by forcing change through the “Internet Plus comprehensive agricultural services” model.

However, under such an approach of all-round, deep integration of the internet and agriculture, because of the characteristics of agriculture itself, agricultural e-commerce must achieve a “shift of the center downward”, and must truly put its efforts into the land and stay close to farmers, so that it can gain a more solid foundation for development. Take the agricultural input e-commerce platform “Yunnongchang” as an example. To date it has established hundreds of county-level service centers and tens of thousands of village-level service stations, covering more than ten provinces and regions including Shandong, Henan, Jiangsu, Hebei, Liaoning, and Inner Mongolia, and serving a land area of nearly 300 million mu. These village-level service stations, like capillaries, effectively penetrate the most upstream agricultural market, stay zero-distance close to front-line agricultural production land, and help agricultural input sellers “go all the way” down into the rural terminal market. On the other hand, these stations also help farmers hand in hand and directly promote genuine products from legitimate manufacturers on the platform, greatly reducing the cost of agricultural input procurement and improving the efficiency and quality of agricultural input procurement.

Quote a line from Niu Dandan in the TV drama “Old Peasants”: “Farmers cannot do things that take them away from the land.” In agriculture, the worst thing is to be impetuous. No matter how far the times and technology develop, the root of agriculture always lies in taking root in the land. This is also the motto by which Yunnongchang carries out its “running close to the ground” strategy. This requires entrepreneurs to hold an attitude of reverence toward agriculture and to cultivate it with dedication. Any enterprise doing agriculture is like farming every mu of land beneath its feet. Without a down-to-earth spirit, good fruit cannot be produced.